7-11: Sag Harbor, Greenport, Undocumented Immigrants, Exploitation

If you go into the Sag Harbor 7-11 today, it will appear to you that everything is exactly the same as it always was, except for the employees. They are completely different. A change in ownership? Where have the former employees, mostly Pakistanis and Filipinos, gone? They were here yesterday, now they are not.

It’s been much more profound than that. And what has happened at that 7-Eleven, is, if proven true, an extraordinary story and a remarkable indictment of local real estate rental enforcement, immigration policies, business procedures, the lack of government oversight and personal exploitation. The American way of life might be better than any other, but apparently not always by much.

It was all explained in an extraordinary press conference held three weeks ago by U.S. Attorney Loretta E. Lynch, who appeared along with agents from the public affairs office for Immigration and Customs Enforcement Homeland Security Investigations and other enforcement organizations. Involved is the 7-Eleven in Sag Harbor, along with the 7-Elevens in Greenport and Cutchogue.

7-Eleven, a Japanese-owned conglomerate, has more stores around the world than any other franchise, including McDonald’s. All together there are more than 50,000 7-Eleven stores worldwide. Some 7-Elevens are owned by the parent company. But most are run as franchises, with individual entrepreneurs getting a franchise license and running one or more stores. Though headquartered in Japan, 7-Eleven has sub-headquarters in every country, here in America in Dallas.

Here, in sum, is what U.S. Attorney Loretta E. Lynch said at the press conference and what can be gathered from other sources.

A very well-to-do couple lives in a grand mansion in Head of the Harbor on Long Island, and this couple, together, or in combination with other members of their extended family, own, co-own and control twelve 7-Eleven franchises, most on Long Island and the remainder in Virginia.

They are being accused of bilking more than $182 million in the last 13 years from the revenues that have come through the door, not from the register, but from manipulations made to their employees’ pay. A number of their employees were illegal immigrants, largely from Pakistan and the Philippines. Fearing deportation, Lynch said, they kept quiet about this for years and years.

Lynch described how this worked. According to the indictments, these people would be brought over, put up in unregulated homes this wealthy couple had bought or rented near the stores they owned, required to pay a rent in cash, and then were required to work long hours at the 7-Eleven, often 100 hours a week. These employees who worked 100 hours a week would be paid for only 25 to 30 hours.

How could workers get so little for 100 hours of work? N.Y. State Police Superintendent Joseph A. D’Amico said they believe the illegal immigrants were provided with false documentation. The couple are alleged to have stolen the names and Social Security numbers from children as young as eight, some dead people and at least one Coast Guard cadet. They would then, according to the indictment, put the false information into the company’s automated payroll system. Dallas would get the information, which all looked proper, then they would honor the requested payroll and send the wages to the defendants, who were then to pay the employees. According the charges, the defendants paid the employees less than they were supposed to and kept what ended up being millions for themselves.

As a result of all this, the following things have happened. The couple, who are naturalized American citizens, are originally from Pakistan and are Farrukh Baig, 57, and his wife Bushra Baig, 49. The Baigs are being held without bail. The charges include conspiring to commit wire fraud, stealing identities and concealing and harboring illegal immigrants. Seven other people, either from Pakistan or the Philippines, have also been charged.

The federal government has moved to forfeit the franchise rights to ten 7-Eleven stores in New York and four in Virginia. They have also put into forfeiture five houses in New York where employees lived in what one official described as “plantation” circumstances.

A lawyer for the Baigs said his clients were not guilty and were operating their businesses in the best American tradition while abiding by all the proper laws.

A spokesperson for 7-Eleven, Margaret Chabris, said 7-Eleven, Inc. “will take aggressive actions to audit the employment status of all its franchisees’ employees. 7-Eleven Inc. is taking steps to assume corporate operation of the stores involved in this action so we can continue to serve our guests. We continue to cooperate with federal authorities in this matter.”

And so, the coffee at 7-Eleven is still being served as always. The store did not miss a beat, except that one day it opened late. You’d hardly know the difference in the service at the store between then and now. Except it has all new employees.

Years ago, when the franchise applicant for 7-Eleven applied to open the store in Sag Harbor, the townspeople vigorously opposed the application. Businesses in that town needed to be owned by people who live in the town, they said. That way we know them and they know us. 7-Eleven is a corporate situation run from far, far away.

The Village of Sag Harbor had no laws that could keep 7-Eleven away. And so the store came and opened. And now, if these allegations prove true, we know the rest.